Best ELSS Funds for Investment in 2016

ELSS Funds (Equity Linked Saving Scheme) are one of the best and most popular tax saving options for the investors. ELSS investment serves two purpose (1) Tax saving (2) Wealth generation. If you are doing tax planning exercise, you must be looking for good ELSS fund for investment. Let’s take a quick look at ELSS benefits, features and try to analyze and identify the Best ELSS Tax saving Mutual funds for investment.

Features of ELSS funds

ELSS is diversified equity mutual funds available for tax saving purpose. ELSS invest a majority of a corpus in the Equity market.

ELSS funds have both dividend and growth options.

This type of fund has a lock-in period of 3 years from the date of purchase.

You can start SIP (Systematic Investment Planning) in ELSS with a minimum investment of 500 Rs.

Why ELSS is best as Tax saving Instrument?

Tax Deduction of 1.5 Lakh can be claimed under Section 80 C of Income tax by investing in ELSS.

ELSS comes with Lock in a period of 3 years. This lock-in period is lowest compare to other tax saving options like tax saving fixed deposit and PPF. PPF investments are locked for 15 years, Tax-saving fixed deposit is locked for 5 years compare to that ELSS has a lock in period of 3 years only.

ELSS funds fall under the EEE (exempt-exempt-exempt) category same as that of PPF and Sukanya Samriddhi Account. Under this funds investment amount get a tax deduction, withdrawal amount is tax-free and no tax will be charged for capital gain also.

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